Dismissing a Republican boycott, Senate Democrats pushed ahead Thursday with a highly unusual confirmation hearing for Mr. Mayorkas — who is both a target of an inspector general investigation and President Obama's pick to be No. 2 at the Department of Homeland Security.
Mr. Mayorkas said he met with Mr. McAuliffe two years ago to discuss the former Clinton fundraiser's dissatisfaction with the agency's program for issuing green cards to would-be immigrants in exchange for high-dollar investments in U.S. companies.
"I heard those complaints, and that was the extent of the interaction," said Mr. Mayorkas, who is up for deputy secretary of the Department of Homeland Security. "I do remember returning to the office and complaining about the fact that I had to hear complaints. That is all."
Documents released Wednesday by Sen. Chuck Grassley, Iowa Republican, show a businessman seeking to invest in the sister firm of Mr. McAuliffe's former green car company in exchange for U.S. legal status is a top official at Huawei Technologies Co., a Chinese telecommunications giant recently accused of spying. The company has denied those allegations.
Investigators have told lawmakers that Mr. Mayorkas is being probed for ramming through a visa application for McLean-based Gulf Coast Funds Management after it was denied by CIS and that denial was confirmed by the appeals process.
Mrs. Clinton's brother Anthony Rodham is president and CEO of the company, which bundles investment money from foreigners who want to come to America on the investors program. Its sole client appears to be Mr. McAuliffe's former company, GreenTech Automotive Inc.
Later in the hearing, Mr. Mayorkas noted that "Gulf Coast complained in 2011, they complained in 2012 and they continue to complain in 2013."
Republicans expressed dismay over holding the hearing, and have been highly critical of the federal EB-5 program, under which people can invest $500,000 to $1 million in certain U.S. companies are rewarded with visas and, potentially, citizenship.
"I cannot participate in a hearing I believe to be unfair and improper to all parties involved," said Sen. Tom Coburn, Oklahoma Republican.
Sen. Thomas R. Carper, Delaware Democrat and chairman of the Senate Committee on Homeland Security and Governmental Affairs, said he decided to press on with the confirmation, in part, so that Mr. Mayorkas could publicly address the allegations against him, and the nominee denied all the charges.
Under questioning by Sen. Claire McCaskill, Missouri Democrat, Mr. Mayorkas flatly denied the accusations against him.
"I have never, ever in my career exercised undue influence to influence the outcome of a case," the former U.S. attorney said. "The allegations, as they have been framed, are unequivocally untrue."
Mr. Mayorkas said the EB-5 program "is very controversial and it is very complex."
"I do not adjudicate cases," he said. "Difficult and complex or novel issues of law and policy ... reach me ... through cases," he said, explaining that such an issue had arisen with regard to the case under investigation.
The issue concerns a technical issue with the requirement that investment money put forward by would-be immigrants remain at risk throughout the term of the investment.
"I made no orders regarding these cases," Mr. Mayorkas said. "What I did was to sit down and resolve the issues ... with colleagues [which he had] done hundreds and hundreds of times" throughout his career.
"I made a decision ... based on the law and the facts," he said.
The accusations against Mr. Mayorkas center on an EB-5 application by a Chinese national filed by Gulf Coast Funds Management, based in McLean. The visa program and its use by Chinese businesses to invest in U.S. infrastructure projects has raised security concerns in Congress and within the Obama administration.
The investigation, launched in September after a tip from an FBI counterintelligence analyst, is examining charges that Mr. Mayorkas approved the visa despite the appeals, and that other CIS staff tried to obstruct an audit of the EB-5 program.
Only a few Democrats attended the hearing, even though Mr. Mayorkas, if confirmed, is likely to end up leading the department until a permanent replacement can found for Homeland Security Secretary Janet A. Napolitano.
Ms. Napolitano announced this month that she will step down in September, leaving a total of 15 senior positions in her department vacant or about to become so.
Matthew Cella contributed to this report.